The “controversial” Andréa Michael — the feds are very angry with her over Judy Millerist leaks of their pending case against Dantas back in April — contributes to this Folha de S. Paulo report on alleged favoritism shown to Daniel Dantas by public servants, as yet unidentified, in the Ministry of Justice.

Dantas is charged with attempted bribery of a federal agent in order to remove his name from the case known as Operation Satyagraha.

On the front-page of UOL, the headline is quite another, note:

“Government tabled proceedings against Opportunity.”

This seems like a likely example of the usual sort of malicious headine bias you regularly find on UOL.

There is quite a bit of difference between saying that “the current Government” stepped in to table the proceedings and that someone in some government agency may have interfered, or put the fix in, or whatever.

It’s like saying “Bush government involved in sex scandal” because some minor official at the Dept of Agriculture was caught deflowering sheep.

In Brazil, you have the State — with its armies of permanent civil servants engaged in constant Machiavellian turf wars on the public dime — and then you have the Government — the latest poor saps whom the voters have put in charge of appearing in all the photo opportunities, in order to make it look like there is a functioning democracy here.

Which there is, let it be said, but not yet a reasonably non-dysfunctional one in all cases.

There are still vast stretches of bureaucratic latifundio run by people whose attitude is, “governments come and governments go, but the hereditary fiefdoms of the State bureaucracy abideth forever.”

With that caveat, the substance of Folha’s story seems journalistically impeccable.

National Justice Secretary Romeu Tuma Jr. ordered an internal probe to determine whether Opportunity, led by Daniel Dantas, received favorable treatment in proceedings that were effectively quashed inside the Ministry of Justice’s Department of Asset Recovery and International Law-Enforcement Cooperation (DRCI), for which Tuma is responsible.

The announcement came after the Folha asked the secretary for information on a proceeding against Opportunity that was archived in the DRCI, despite suspicions that the bank had made illegal fund transfers for Brazilian citizens into fiscal paradises.

The investigation into Opportunity was quashed at a time when the department was led by Antenor Madruga, who is currently a partner in the offices of one of Dantas’ lead attorneys, Francisco Müssnich, the boyfriend of Dantas’ sister, Verônica.

Mixing business with pleasure — gemeineschaft and geselleschaft — seems to be a trademark of the Dantas Philosophy of Business as Hobbesian Guerrilla Warfare.

There was, for example, that ugly incident in which he tried to get Demarcos’ estranged wife to testify that Demarcos beat her …

Sought for comment, Tuma Jr. said he found the case file in the archives of the DRCI and has ordered an internal investigation. “There really is an old case, unsolved, that was filed in an irregular fashion. We are going to investigate to determine the consequences, the scopoe, and the depth of these events.”

Any relation to THAT Romeu Tuma, you ask?

The former federal police chief and current senator from São Paulo — formerly for the PFL but now for the PTB — whose name appeared in the phony dossier, sourced to Dantas, that was published by Veja magazine?

Of course, you dummy: His son. Are you starting to get the idea? Public service is often a family business in Brazil — in part because it pays ridiculously well.

Exercise: Draw up a list of current Brazilian federal lawmakers with close relatives who are current or former lawmakers or other senior government officials.

You could start with Sarney, daughter and brother of Sarney, and Magalhães, son of Magalhães the son of Magalhães. Its like trying to decipher the boring parts of an Icelandic saga.

In 2003, the Justice Ministry received a memo from the federal controllers’s office (the CGU, a cabinet-level agency of the federal executive) warning of possible investments by Brazilians in a tax-exempt fund opened by Opportunity in which Brazilian citizens and Brazil-domiciled institutional investors were barred from investing.

Madruga headed the DRCI from its founding in early 2004 until March 2007. A few months after leaving the ministry, he became a partner in the law firm of Barbosa, Müssnich & Aragão, among whose founding partners is Francisco Müssnich.

Müssnich defended Opportunity, among other cases, in a proceeding by the securities regulator, the CVM, that dealt specifically with the Opportunity Fund. In September 2004, the CVM voted unanimously to fine the Opportunity Group R$480,000.

The penalties were applied to Verônica Dantas, Dório Ferman (presdident of Opportuniy) and three Opportunity subsidiaries over transactions that violated Central Bankk rules and Brazilian tax law. The fines were suspended after an appeal by Müssnich to the Appeals Council of the National Financial System.

The international investigation opened by the National Justice Secretariat will try to discover who was responsible for archiving the charge forwarded by the CGU, and whether it was archived improperly.

The Secretary has just been quoted prejuding that issue.

If it concludes Dantas received undue favoritism, a criminal charge could be odged with the federal prosecutor.

Demarco told the CVM he had invested R$500,000 in various subfunds of the Opportunity Fund, in the Caymans, in 1997. He also said the bank let Brazilians invest in funds created for foreign investors, in violation of Brazilian law. He gave the CVM faxes, e-mails and spreadsheets regarding these investments.

In testimony to the CVM, Opportunity employee Rosângela Browne said she filled out two subscription applications for the fund on Demarco’s behalf, “for the purpose of investing in the subfunds Opportunity Fund Money Market and Brazilian Hedge.”